In hindsight, it was perfectly predictable.
Amazon, which has become the world’s largest e-commerce business, ships a lot of packages.
If you look at the history of the company, a distinct pattern emerges: When it discovers it’s good at something, it proceeds to disrupt established businesses that do the same thing. It did it with books, when its Kindle e-reading platform tore into the traditional paper publishing business. It did it with cloud computing, when it launched Amazon Web Services to compete with behemoths like Google, Microsoft, and IBM.
The formula has repeated itself with hardware, like tablets and streaming media sticks, and digital goods like music and movies.
It’s most ambitious move however, might be its most recent one: Logistics.
Now, two years after its launch, Amazon Logistics is perched on the edge of disrupting not just one business, but an entire industry, which includes UPS, FedEx, and the US Postal Service.
To meet this challenge, FedEx is responding by digging deep into Amazon’s traditional strength: Digitalization — specifically, robotic automation, and the IoT.
Using the IoT is a natural extension of FedEx’s core business of moving physical objects from one place to another and tracking their progress at every step of the journey. Its SenseAware — a device that provides near-real time data on packages for factors like location, relative humidity, temperature and light exposure — is seen as a key competitive advantage over its rivals.
“We have long known that information about the package was as important as the package itself,” Ed Clarke, Managing Director of Hub Operations for FedEx Express UK, recently told supplychaindigital.com. For customers like pharmaceutical manufacturers, being able to track the temperature of a shipment of vaccines, could literally mean the difference between life and death.
On the robotics front, the company faces a steeper climb. It has been investing for years in automation, but successful automation relies on a consistency of task, a luxury FedEx doesn’t have. “One of the challenge we’ve always had in our world of robotics is that every single package is different in terms of size, shape weight, materials,” Ted Dengel, Director of Operations Technology and Innovation at FedEx Ground, told Diginomica.
Challenging or not, it’s an area FedEx must master. With e-commerce volumes expected to increase between 15% and 18% over the next five to ten years, the alternative is to cede ground to the competition.
“Our digital transformation is underway,” Clarke said. Now all FedEx has to do is deliver.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
The weakest link: Honeywell taps AT&T to help bridge spotty IoT connections
Unreliable communication networks meant transportation companies are unable to capture full value from the IoT. But that’s changing.
If it’s true that a network is only as strong as its weakest link, it could easily explain why logistics providers have been less than thrilled with the rollout of some IoT freight solutions.
In the freight and shipping business, containers and other physical assets move from place to place, sometimes over long distances, where network connectivity can be poor to non-existent. Most cellular networks — especially the latest 5G networks that are beginning to roll out worldwide — are designed to serve large swaths of population. Urban areas represent the motherlode in terms of service, while rural regions like farmland or rough, mountainous terrain are often dead zones.
This simple reality creates a challenge for any IoT platform that needs to reliably communicate from all points along a shipping route.
In 2017, 100 surveyed freight and logistic companies said that unreliable communication networks meant they were unable to capture full value from the IoT. Connected sensors aboard trucks and trains are designed to provide real-time capture and communication of critical data, such as location, temperature, light, humidity and pressure.
Honeywell, which provides digital transformation and IIoT services to its clients, realized that it needed to be proactive to address this challenge. Conventional wisdom suggested that what was needed was a satellite-based communication platform. However, such space-based systems are expensive when compared to terrestrial equivalents, and not necessarily optimized for the constant, yet low-bandwidth requirements of freight IoT sensors.
So Honeywell formed a partnership with AT&T to devise a communication solution that delivered the cost benefits of terrestrial with the coverage of satellite. Their combined system “works via a mesh network protocol which allows the sensors to communicate data back to a nearby centralised gateway device,” according to Computer Business Review. The result: Vastly improved connectivity via next-generation Low-Power Wide-Area (LPWA) networks.
“It gives logistics providers near real-time data insights about their shipments in-transit,” says Sameer Agrawal, general manager of IoT Solutions for Honeywell Safety and Productivity Solutions. “And we can unleash a wide array of connected products and services for aircraft operators.”
With some projections estimating that the logistics automation market will be worth $101 billion by 2024, the need for a robust, reliable, and ubiquitous wireless communication link has never been greater.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
The WestJetter propelling an airline into the future
Digital Disruption is commonplace these days. It occurs so frequently that when it happens it’s not as impressive as it once was. However, it’s an incessant reminder to the C-suite of many traditional organizations of the need to transform in order to keep pace with a market that is unpredictable and in an environment that is far from stable.
Alfredo C. Tan, the newly-minted Chief Digital and Innovation Officer at WestJet, has been tasked with driving this new direction for the Canadian airline as it moves to become a global success story. In just two decades, WestJet established more than 13,000 employees, over 100 destinations in North America, Central America, the Caribbean and Europe and an additional 175 destinations in over 20 countries through partnerships.
As with almost all industries, the global tourism and travel landscape has witnessed significant changes. This $7.6 trillion sector has seen a pronounced shift in its business model, in part because of disruptors like Airbnb and Uber. The airline industry will not be immune. Crippled by legacy operations and heavy regulation, the desire to transform is not a feat that is surmountable in a short period of time.
This 2017 report published by the Centre for Aviation acknowledged these changes:
Above any other industry, airlines are captured within an arcane regulatory framework designed 70 years ago, and whose purpose was to achieve little else than protect against new entry. It is a capital intensive heavily unionized industry, and it is dominated by legacy models still focused on buying and flying expensive metal. But at its heart the airline offering is just another consumer retail product. As such, it is just as susceptible to upheaval… The airline industry as we know it will be unrecognizable by 2025, as fundamental features are uprooted. The process will be accelerated because of the confluence of disruption in each of the key aspects of commercial aviation: flying and selling.
I had the pleasure of sitting down with Alfredo C. Tan to explore his journey to WestJet and his vision to instigate some necessary upheaval in an already accomplished organization.
Obsessed to Join the Movement to Empower the Internet Generation
Alfredo remembers Cisco Systems “Empowering the Internet Generation” commercials. The powerful message depicted a world transformed by this eventual connectivity across networks and markets. As a student of forensic science and biology at the time, he felt he had missed the opportunity to be part of this incredible wave of dot.com companies being born.
When he graduated, he read an article in Fortune Magazine about top business school graduates turning down blue chip companies to go chase the new Gold Rush in Silicon Valley. Not one to let another opportunity go by, Alfredo learned how to code and immersed himself in computer and technical courses. Soon he landed at Bell Nexia in Systems Engineering and Design where he eventually led a team of engineers to help restore connectivity between telcos in NYC and Toronto during the World Trade Centre disaster. Along the way, Alfredo had looked to mentors willing to teach him:
Most things in the professional world you can excel at without a formal education in that field. With enough mentorship, intellectual curiosity, aptitude, grit and passion you can find success almost anywhere.
Whether it was Bell Canada where he learned to build large scale strategic alliances, enterprise marketing and strategy, or at MSN.ca where he was introduced to the disruptive world of online advertising, media sales and internet marketing, or at Yahoo! Inc. working on Mobile, Search, and corporate partnerships, Alfredo’s journey exemplified this learning mantra throughout his career.
Facebook: The Platform that Changed Everything
If you could see the future and know within a decade your company has just entered the S&P500, you would not hesitate to join. In 2008, this was hardly evident, and Alfredo grappled with the decision to leave an amazing job with endless opportunities within a company that was still an internet powerhouse for a social network that was perceived to be overvalued, had no clear monetization strategy, no real market differentiator and one that could have easily gone by the wayside like MySpace or Friendster. The defining moment for him came when he returned from a trip in 2008. As he remembers,
Before I returned from a trip in 2007, I exchanged email addresses among those I had just met. And by the time I went on a trip in 2008, everyone exchanged ONLY Facebook IDs. Within 12 months the movement from email to Facebook was unreal. What Facebook was really building was identity at scale. What it really has is people – 2.2 billion people. And as it continues to grow, it continues to be unassailable.
He chose to venture to Facebook despite all the guidance and advice otherwise. He remained there for 8 years, where he spent the last two years working with the leadership teams in the high growth markets of South East Asia and Latin America. The learnings were life changing and career defining.
Why Can’t Traditional Businesses Adapt to Market Changes?
For all the gains Facebook and social networks have made globally, business has still not fully embraced the changes required to keep pace with the dynamic market.
Alfredo points to disruptors like Google, Netflix, Facebook, Microsoft, Uber, Apple and Amazon. These companies have a different way of building their innovation culture. What’s common among them?
- They move with a sense of urgency
- They worship velocity
- They are unafraid of change
This is a polarized view of how traditional companies operate.
As the Chief Digital and Innovation Officer of WestJet, Alfredo’s experiences make him ripe for the challenge ahead. WestJet recognizes the need for change and a culture that supports the changes required. As a traditional company, it behaves much differently than the environments Alfredo was used to. Coming from the tech space, there is a common understanding, a common way of thinking because technology isn’t something you need to convince people to invest in.
It’s hard-coded in the DNA of the company.
In most traditional companies digital is not foundational to the success of the company. Success comes from other practices within the organization. The challenge becomes convincing a group of people in a company to invest in what you believe to be true.
Alfredo would argue the majority of leaders and employees understand the world has dramatically changed but it’s not clear how digital could be a competitive advantage. There’s a process in education and winning the hearts and minds of people to “believe it before they see it”. The executives were sold on change as the new normal at WestJet. Alfredo was inspired by the genuine interest and motivation by the employees to make this a reality.
WestJet’s First Ever Hackathon
Thinking differently takes time. You can’t make the assumption that people understand simply by saying. Just as he continues to learn about an infinitely complex industry, Alfredo and his team, in turn, need to educate and tell the story in a way that helps the entire company understand the impact of digital and innovation on the business, without the jargon and without the hype.
This came to fruition soon enough. WestJet’s VP of Loyalty, d’Arcy Monaghan and Rhonda Reynolds, Product Development Manager, approached Alfredo about developing solutions for the premium traveler, which could then trickle down to all of WestJet’s guests. Alfredo had only been in the job a few weeks and didn’t feel he and his already-constrained team were in a position to solve the problem on their own.
While the original idea was to hold a brainstorm among a group of people from various departments, it quickly morphed to include some of Alfredo’s friends from the tech industry. As more people heard about it, the more they wanted to participate. The kernel grew into this idea of a full day hackathon, a competition to develop a seamless premium guest experience and #HackInTheHangar was born.
Alfredo invited some of the biggest tech companies and systems integrators like Adobe, Facebook, Amazon, Deloitte Digital, Google, Panasonic Avionics, Twitter, LinkedIn, Snapchat, Hootsuite, IBM, Salesforce, Huge Inc. In all, 17 companies and their 120 people from technical, creative and design backgrounds were paired with 37 WestJetters and a dozen of WestJet’s premium travelers to participate in this one-day event. As Alfredo points out:
The initial, very simple idea gave birth to this movement in the company which aimed to answer a few key questions:
- How can we show 13,000 people that we can solve problems in a different way and co-create new experiences?
- More importantly, at a greater velocity:
- How do we get non-technical people to solve problems in a hack culture?
- How do we gain the respect of the global tech community to be be inspired and partner with us in our digital and innovation mandate and co-create the future of travel?
- How do I win the support from key executives in the organization who I would need in order to succeed?
The judges for the event were chosen with care and purpose. The objective was to demonstrate the amazing thinking and solutions that were developed within one day, and to have them understand and evangelize Alfredo’s vision for the company.
The Digital Company that Just Happens to Fly Planes
By the end of the day, the executives at WestJet needed little convincing. Louis Saint-Cyr, the Vice President of Guest Experience indicated that airlines with legacy behaviors limit what they can do for the customer. The hackathon revealed WestJet’s need to align with what will be an increasingly digital guest journey. He validated the industry’s current push and pull between innovation and regulation which has produced operating limitations. Despite this, Louis saw huge possibilities:
This hackathon revealed how we can innovate around these structural limitations. How do we digitally empower the front lines and augment soft skills WestJetters are known for with technology to tailor guest experiences?
…Think of the hurdles that go into a customer’s travel journey: the time to get to the airport, the waiting times for bags, the check-in – things that can add stress. By leveraging the emotional framework of social media and aligning it to the guest journey, we can address these hurdles in a direct way to transform air travel for guests.
…Overall, by amalgamating guest profiles with their expectations to what they’re experiencing on board, on the website, and in the airport we can make significant strides in the guest experience.
CEO of WestJet, Ed Sims closed the day and declared that in 24 months, WestJet will be a digital company that happens to fly planes. It sent a signal to the tech community and the leadership team that this hackathon wasn’t just a side project; this will literally be the future of the company.
WestJet’s first hackathon represents a cultural shift toward more innovative thinking at WestJet. We will move fast, learn fast and build fast. We now have an opportunity to do things differently and to innovate in the travel space like has never been done before. Our goal is to have products way ahead of guests’ expectations.” ~Ed Sims, WestJet President and CEO
Alfredo’s next steps?
The hackathon and the thinking it surfaced are all theatre and theory until you start to build. We have to build the capabilities that we saw were compelling plus other capabilities we will investigate in the future. Innovation is a cultural mindset more than anything else but it comes from building.
These brilliant ideas will lay the groundwork for developing those capabilities over the next five years. In addition, given the incredible demand to repeat more events after the hackathon WestJet is planning to host an annual event with different themes.
In a short period, the acceptance the hackathon generated, instilled an idea to embed the hack culture into the company as a way of addressing problems and empowering cross-functional groups to self-organize and invent solutions in a confined period of time.
We’ll find a way to make it pervasive in the organization so a flight crew member who wants to fix a process can gather a group of people to create a solution then present that for budget approval in a matter of days. It’s bringing the hackathon to smaller scale, smaller team sizes, with less fanfare. Hopefully, that will influence 13,000 people to start to think this way.
We are just getting started… In the end, I would have failed in my job if I was the only one responsible for the digital and innovation culture. It’s for all WestJetters to embrace it and the future.
For someone whose mantra is to be curious and continue learning, Alfredo C. Tan, in the first 90 days, has pushed the organization to think differently, learn new ways of doing things, and challenge the limits of their imagination.
Hessie Jones is the Founder of ArCompany advocating AI readiness, education and the ethical distribution of AI. She is also Cofounder of Salsa AI, distributing AI to the masses. As a seasoned digital strategist, author, tech geek and data junkie, she has spent the last 18 years on the internet at Yahoo!, Aegis Media, CIBC, and Citi, as well as tech startups including Cerebri, OverlayTV and Jugnoo. Hessie saw things change rapidly when search and social started to change the game for advertising and decided to figure out the way new market dynamics would change corporate environments forever: in process, in culture and in mindset. She launched her own business, ArCompany in social intelligence, and now, AI readiness. Through the weekly think tank discussions her team curated, she surfaced the generational divide in this changing technology landscape across a multitude of topics. Hessie is also a regular contributor to Towards Data Science on Medium and Cognitive World publications.
This article solely represents my views and in no way reflects those of DXJournal. Please feel free to contact me email@example.com
Hyperloop: Engineering the future of transportation
By: Manoj Mathew
Next year will mark 150 years since the last spike was driven into the final railroad tie connecting the first transcontinental railroad in the U.S.
On May 10, 1869, supervisors and crew members from three railroad companies gathered a mile above sea level at Promontory Summit in Utah to watch Leland Stanford, the president of Central Pacific Railroad, drive the ceremonial 17.6 karat “Golden Spike.”
Private enterprise spurred the railroad’s development. The government supported it. And as travel time dropped from East to West and back again, the intended increase in commerce followed. As raw materials and finished goods could be transported much more quickly, industrialization of the West picked up speed.
What’s Good for Transportation Is Good for Commerce
Commerce constantly strives to access new markets faster, moving more goods and more people, more cheaply. That drives investment in improved transportation – safer, faster and more economical. Technological advancements in AI, robotics and faster machine-to-machine connectivity allow asset-intensive environments to optimize their performance, take decisive action more quickly, collaborate among themselves and collectively learn.
Take the automotive industry. Carmakers are already reimagining the concept of transportation using perceptual computing (machines that interact with their surroundings using five senses) and pervasive computing (embedded micro controllers to make machines ”smart”) to speed travel, promote safety, improve fuel economy and achieve sustainability.
As the world’s population grows, however, and more people can afford to buy automobiles and other forms of transport, infrastructure and the global environment are coming under intense pressure. Clearly, our planet would struggle if every inhabitant owned an automobile.
Today, digital innovation has purpose beyond commerce: to tie people together without more gridlock; to reduce energy emissions (since even electricity generation burns fossil fuels); to get people from place to place faster, more safely and economically; and to develop innovative products that improve the customer experience — and their lives.
To meet these dictates for transportation systems, no development looks as revolutionary as Hyperloop, a low-pressure tube in which passenger pods travel at a rate near the speed of sound. The transportation system is designed to be underground or supported on pillars above the ground to lessen accidents and natural disaster risks. And Hyperloop proposes to cut rail and automobile travel times between cities such as New York and Washington, D.C., by five or six times.
Certainly, Hyperloop faces engineering challenges. Not the least of these is the effect on the human body of rapid acceleration and deceleration while having to negotiate curves, peaks and troughs. Other practical challenges include energy, efficiency and sustainability. But these are technical challenges that engineers are addressing, including alternative fuel sources such as solar panels, lighter materials, and combining magnetic levitation (maglev) with propulsion systems that convert higher air pressure at the front of the pod into a propellant that supercharges pod performance.
Early Hyperloop experimentation is arousing interest from California to the Netherlands, and from China to Mumbai. As for the practicality of transporting people safely, a development team at the Delft University of Technology recently revealed its ATLAS 01 Hyperloop pod, a half-size prototype of its design for a vehicle to carry passengers inside the Hyperloop tube. TU Delft’s graduate-level engineering team began development of its current entry in September 2017, after the first Hyperloop pod design competition was completed earlier that year. In that earlier Hyperloop competition, which evaluated the best pod design, the TU Delft Hyperloop team won first place overall.
Meeting the Hyperloop Challenge
The recent public reveal of TU Delft’s Hyperloop pod, ATLAS 2.0, comes in advance of a SpaceX Hyperloop competition that will take place July 22, inside a half-size test Hyperloop built by Elon Musk’s SpaceX at its headquarters in Hawthorne, Calif. The team whose model achieves the highest speed wins the competition. This is a tough challenge, as the pod must accelerate, achieve top speed, brake and then come to a full stop in a single kilometer, the total length of the test loop.
Cognizant Digital Business is supporting the TU Delft team as a Prime Partner in the development of its prototype. Its Hyperloop pod’s control system depends on an enormous array of sensors and sophisticated algorithms. Our Connected Products team is helping the team refine and test model-based simulations of the interplay of sensors, the environment and the vehicle. These models of the physical environment — so-called digital twins — allow scenario-testing of the pod itself, with the goal of making it “fail-safe.” (Watch this video to see how.)
This parallels Cognizant’s work in the similarly promising realm of connected cars, rail, airlines, even bicycles. We are providing the TU Delft team with advice and technical support to help ensure the reliability and safety of its designs. The team writes specifications for ways to reduce risk; then they write the software. We test it for them, against our own hardware and software. As with all our work, we’re seeking to bridge the digital and the physical worlds to create real-world solutions.
A New Legacy
The legacy of “the Golden Spike” was easier movement across the country, greater market access and larger profits. Now, technological innovation is leading us forward again, to a future of transportation enabled by digital thinking and technologies built around sensorization, AI, hardware and software design, and human-centered product innovation and engineering.
Humans will continue their quest to realize cheaper, faster, more sustainable modes of transportation. Other mega-programs, like Big Falcon’s effort to provide point-to-point space travel (New York to Shanghai in 30 minutes), are already underway. For now, Hyperloop offers the promise of a Golden Spike in innovation in the 21st century – one that drives connections and commerce that benefit us all. We’re thrilled to be participating in the SpaceX competition. The world will be watching.
Raj Ravindranathan, Head of EMEA Cognizant Connected Products, contributed to this blog.
This article originally appeared on the Digitally Cognizant Blog
Cognizant (Nasdaq: CTSH) is dedicated to helping the world’s leading companies build stronger businesses — helping them go from doing digital to being digital.
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